07:53 – Greek elections results are in. New Democracy and PASOK between them have enough votes to form a coalition with a slim majority, but PASOK has announced that it will not be a part of any coalition government that does not include the far-left Syriza party. The most likely outcome is a three- or four-sided coalition that will claim to be attempting to comply with the Troika terms while insisting on their modification.
This result was actually the best that the supporters of Greece remaining in the euro could have hoped for, expecting that it would buy Greece and the euro a little more time. That hope has already been dashed this morning. After a very short upturn in the markets, the plunge has reasserted itself, with Spanish benchmark 10-year bond yields hitting new record highs above 7% and Italian benchmark yields again climbing over 6%. In other words, Spain has lost access to the markets and Italy nearly so.
I just read an interesting article: Will ‘showrooming’ kill businesses?
The interesting part is that the author is completely clueless about how showrooming actually works these days. He talks about people visiting stores to look at items they want to buy, recording the details, and then going home to look up better deals on the Internet. That’s so 2009.
The way it actually works is that people point their phones at the barcodes on the items in the stores. An app running on their phones scans the barcode, hits a price comparison site, and lets them order the product on-line while they’re standing in front of it in the store.
Nor is this a new phenomenon. When I was working at Entre Computer Center nearly 30 years ago, we called them SHABEs. Shop Here And Buy Elsewhere. And that was even more annoying, because they weren’t just comparing prices and then buying somewhere else. They were taking up the time of our sales staff–all of whom were very knowledgeable not just about computers and networking but about their application to business–getting detailed advice and recommendations, and then buying from places that could sell at deep discounts because they employed minimum-wage order takers.
Ultimately, there’s simply no way that local stores can survive if they’re selling what amount to commodities. In that business, you have to be efficient, and brick-and-mortar stores are inherently inefficient. When local stores come up against competition that uses a more efficient business model, they’re going to lose. That’s what happened to music stores, bookstores, and video stores, all of which were attempting to sell commodities in competition with more efficient suppliers.
But showrooming really isn’t the problem. Only a tiny percentage of buyers actually showroom. The problem is that for many stores the vast majority of their potential customers are like me. They don’t bother to visit the store at all. They don’t even consider buying locally. They just use the web to find a good price from a reputable vendor and order the product.
Clothes, tools, and groceries are the only things I buy at brick and mortar these days. If I need a tool and I do not have it, I need it right now, so somebody local is going to get that purchase. I need a new polo shirt and there are a few stores I will try, in order to find the best fit.
Oh, office supplies I mostly buy at one of the competing office supply stores. I find their prices actually do compete with Internet shopping. But, like our host notes, these days their people don’t even know the stock, let alone anything about it. Around here, Office Depot and Office Max employees never offer to help anymore, nor do they in most Staples. One has to seek out help, if needed.
<all of whom were very knowledgeable not just about computers and networking but about their application to business
That turned sour quickly when I was working at a large bank. The head of a department had visited a local computer store and decided on a computer based on the salespersons recommendation. It was a Radio Shack Model II. The reason the department head bought the machine was because it was faster than all the others. Why? Because the salesperson said it was a 9600 baud system and the IBM systems were only 2400 baud.
I then had to integrate that piece of junk into our Burroughs network system. On the IBM machines were using we had software and a small board to do the interface. For the TRS80II I had to purchase an expensive converter box. All because some stupid and clueless salesperson was wanting a commission.
You may have been different, but I would wager that the majority of brick and mortar salespeople expertise could be aggregated into a thimble.
Yeah, we were different. For example, our installers were vendor-certified for installing cabling systems, networking components, and so on. (For example, IIRC, a 2-week IBM training course was required for Token Ring certification. Similar deal for Ethernet, and so on.)
Although we had a retail store front, about 90%+ of the business was done out in the field with mostly corporate customers. We had programmers on-staff or under contract to do stuff like modifying Cobol and dBASE apps. We normally did turn-key installations, which often involved (for example) me lying on my back in a crawl space drilling holes to run network cables.
People have been doing showrooming-like stuff for 40+ years. My sister would get the kids measured for shoes, for example, get all the advice for free, then go to the factory-direct place to get the shoes at a heavy discount. That’s just one of many examples.
I still prefer to buy stuff at brick and mortar stores. The price are often in the ball park and I can see the exact model. And delivery can be a PITA if ordered over the Internet. The delivery company delivers when it suits them, and if I’m out of the office when they call then it has to be rescheduled. I’ll still buy over the Internet if the savings are outrageous, but I only do 3-4 Internet orders per year, incuding Amazon books.
I’ve seen a number of smaller retailers that have started putting their own proprietary SKU as a bar code on a permanent sticker and then placing that sticker over the package’s UPC/barcode. So, when you scan the barcode you either don’t get any results or get the wrong results. Now, that doesn’t stop you for searching by name, but it certainly slows down your smartphone shopping experience.
I love that Amazon.com’s Smartphone App has a built-in barcode scanner. I use it heavily. I use to feel a little guilty standing in a brick-and-mortar store and scanning UPC symbols, but now it doesn’t bother me at all. I’ve been doing it for years. First, I was writing down UPC codes and ISBN numbers on paper. Then, I was texting them to myself. Next, I was taking digital photos of the items. Now, I scan the barcode. I wonder how I’ll be doing it in 5 years.
In five years, you may not be doing it any more. There may not be many stores left to do it in.
Putting fake bar codes on products doesn’t solve anything long-term. Neither does having supposedly unique models that are actually store models. The Internet figures this shit out and routes around it.
I see the Greek situation is such that they all have decided to kick dat can down da road some more, in other words, take very little pain now and hope Jesus or that Spaghetti Monster thing drops outta the sky and makes the ten to fifty years of forthcoming hell not happen. Athens, the cradle of the Goddess Democracy, will soon be the twin to Kosovo, not that far away. Meanwhile the Russians are sending warships to Syria and the Muslim Brotherhood is close to taking over Egypt, if our lords temporal here get their way, believe it or not, in preference to the military honchos. Fun times ahead.
Then there is the failed narco-anarchy on our southern doorstep; that should be good for lots more boffo laffs in coming years, too.
Hi Bob,
I was shopping at Barnes and Noble’s with my Wife a while back, and she saw a book that she didn’t know had been released. She reached into her purse, opened her Kindle, and bought it from Amazon right there… 🙂
Cheers,
Rod
I read that Pep Boys is in trouble and may be going under. Are people scanning oil change bar codes and getting it done by internet? Amazon.brakejob?
Stu, that made me laugh out loud!
I was at Staples the other day buying some envelopes and saw they had a 27″ monitor on sale at an irresistible price. I didn’t feel like carrying it around with me in my car, so I ordered it online with my phone and had it delivered for free the very next day, by one of the store employees. Was that bad?
Bill,
I agree. Several years ago I bought a 20″ monitor at a local store. Next day it would not come up and back to the store and back home with another new one shortly; I avoided the 800 #, RMA BS and UPS, whew!